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* EBIT is projected to equal P850 million. * Gross capital expenditures are expected to total to P360 million versus depreciat million, so its net capital expenditures should total P240 million. The tax rate is 40%. * There will be no changes in cash or marketable securities, nor will there be any o payable or accruals. hat increase in net working capital (in millions) would enable the firm to meet its targe

* EBIT is projected to equal P850 million. * Gross capital expenditures are expected to total to P360 million versus depreciat million, so its net capital expenditures should total P240 million. The tax rate is 40%. * There will be no changes in cash or marketable securities, nor will there be any o payable or accruals. hat increase in net working capital (in millions) would enable the firm to meet its targe

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 20P
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WoC Inc. wants to increase its free cash flow by P180 million during the coming year, which should result in a higher EVA and stock price. The CFO has made these projections for the upcoming year: * EBIT is projected to equal P850 million. * Gross capital expenditures are expected to total to P360 million versus depreciation of P120 million, so its net capital expenditures should total P240 million. * The tax rate is 40%. * There will be no changes in cash or marketable securities, nor will there be any changes in notes payable or accruals. What increase in net working capital (in millions) would enable the firm to meet its target increase in FCF?
Transcribed Image Text:WoC Inc. wants to increase its free cash flow by P180 million during the coming year, which should result in a higher EVA and stock price. The CFO has made these projections for the upcoming year: * EBIT is projected to equal P850 million. * Gross capital expenditures are expected to total to P360 million versus depreciation of P120 million, so its net capital expenditures should total P240 million. * The tax rate is 40%. * There will be no changes in cash or marketable securities, nor will there be any changes in notes payable or accruals. What increase in net working capital (in millions) would enable the firm to meet its target increase in FCF?
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